Member Info for GoCPI

I know this is not related to the ad sector, but nonetheless sectors in deep recession are on the cusp of turning around and taking the share prices up with them. I have a very small holding in Synthomer (SYNT) and their sector (chemicals manufacturing) was in the doldrums from H2 2022 onwards with an ugly 2023, but they're now seeing green shoots per their update today and the SP is jumping 25% as a result. No solid revenue growth based recovery yet, but just commentary that sales declines have bottomed and they have better control on costs and cash flows was all that was needed.

If we can pull off a revenue growth this year, even if it's small, we could then see a solid + sustained recovery over the course of the rest of the year. The optimist in me thinks that this isn't a far-fetched notion at all with the US avoiding a recession!!

6 mill repurchased as of yesterday and if we assume an average price of circa 41p, we may have 600k to go and this round should all be done and dusted by the end of this week. You'd think that additional repurchases will be agreed to by the board and announced alongside the results in a couple of weeks and the only missing piece then for us is to know how the digital ad market has been trending in the US in Q1 thus far. Fingers crossed!!

@JG68 - apologies, I didn't mean for my response to come out as strongly as saying 'it was a pointless question', but it is nonetheless true that when insiders buying doesn't help the share price (Adolfo's purchase did nothing to the market's perception really), why would what either an ex-insider or a current insider says about what the market reaction as reflected in the SP, matter?

The reality is none of us know what the bottom is and what we now know is that all talk from JL about turnaround complete and FCF ready was just complete and utter tripe. I'm glad that AH is focused on cutting costs substantially and that's absolutely needed, but that'll take a while yet to be reflected in the SP - IMO.

"do you think the the current reaction by the market is a fair reflection on how things really are as a going concern?" - JG68, that is a pointless question, IMO, to ask an ex-insider. How can an ex-insider or even a current insider really 'know' if the market reaction is a fair reflection or not of recent goings-on?

He/she could probably give you a view on operational improvements or otherwise, and how much more fat there is that could be cut. The market does what it does - it did this back in August 2023 and its doing this marking down again big time. And until there's clarity on final cost cuts OR FCF projections in the June update, it will continue doing what it will - act unpredictably. Just my opinion though.

And this is exactly why I said I won't yet be an additional buyer for a some more time yet. GL..

On the US macro side of things, NFPs aren't really as hot as the January report - employment numbers from January were revised a lot lower and wage growth in February also wound down along with hours worked rising. All in all, June rate cuts should be shoo-in, but if the news turns a bit more dire, we could get a May cut? That should be a net positive for us lot.

And in under 3 weeks, we'll get more clarity on how the US ad market was trending in Q1 and how that's been impacting SFOR. No buyers here unfortunately and we're still sitting at near all-time lows.

@Trisor - I'm not a Premium member and I don't think I can receive private messages. When I click on Inbox, it asks me to subscribe to a package to get receive/send messages.

That's spot on, Trisor. Revenues can go up not by hiking prices on an adhoc basis (most LT contracts just won't allow that), and when the economy is in a downturn and the consulting business is struggling, you can't bid higher prices on competitive RFP/RFIs. AH acknowledged that the cost base is still too high and he's looking to cut more - an additional £100m by mid-2025. I can bet my bottom quid that AH will push to get most, if not all, of these cuts into the business by the end of 2024. I know it's still jam tomorrow and the strategy update in June will get a better steer on what his thinking is at to deliver tangible shareholder value - a word that didn't fit anywhere inJL's dictionary at all.

Https://archive.ph/cuifK

Reinc - OK, I understand from my sources you're being tapped as the sole subscriber!! Great job.

"Watch the brain-drain start now as people leave the company...." -

where are they going to go when the UK is in the middle of a recession and its not like jobs are dime a dozen? Good job, AH!!!

"My reading of the link below is no new debt will be required as Capita will be drawing on existing facilities . Can someone with an accountants brain comment?"

Trisor - existing facilities aren't drawn and hence won't be debt on the balance sheet. When/if CPI draws money out of these facilities to pay for the cash outflows this year, it'll be additional debt on the balance sheet.

Dear PR lady (Crafty) - please stop gaslighting us on here. Personally I support and I'm many on here would too, cancer charities and have nothing against giving money to such charities. What I find distasteful is a holier than thou attitude that you seemingly espouse. Anyway, this is an investment thread and not a PR forum and I'll leave it at this unless this thread drags on.

Come on Crafty, you shouldn't be as thin-skinned as light-weight Mouldy, or are you his PR orientated dopple-ganger? ROFL...

No problem - let's keep giving the PR team plenty of 0p stock options for posting here. And it looks like your team member 'YesIamaBeliever' just does what you ask them to do. Ask for a new thread, and you get a new 'Great white hope' thread. ROFL again...

Oh dear, if only madders puts a quarter of his focus on doing what needs to be done for THG to realise full value for its shareholders, we'd all be better off won't we?

Near term - I can't predict where this is going and I'm not a buyer at these levels on the back of today's news and the selloff. I have too many on my plate and I'm nursing a big loss today, although it's about half of what Lordy is looking at. Sellers are in control and if history is anything to go by, I won't be surprised to see another 20% draw-down over time from these levels. I look AH's purchase as a statement of intent + positive outlook, irrespective of what happens today or in the next few days.

Maybe he can turn out this beast eventually, but it sure is painful for holders who've been in this from ages and with a higher average than today's near all-time lows.

And the key with the purchase today was it was intended to be stock supportive. He understands that actions like these send out a good signal to the market that he sees value and it was very positive that he made the purchase, a token one as a starter IMO, and made sure that he RNS'd it within an hour or two. That action shows that he has more shareholder focus than JL ever did.

Why are we still talking about JL? Oh wait, he's hanging around for a few more months like a bad rash!!!

That's a good show of support from AH, if there was on. And right after the close period ended!!

".. yet the surprising thing is that none of this was unexpected. We knew that last year was a sh*t show at the f**k factory. What is surprising is that the market is reacting as if it was surprised! I guess some people must have been betting on something magical happening to the numbers between December a now."

Capitalizer - I think it's the revenue and FCF forecast for 2024 that has spooked the market. Dividends are now best case 2025, and RBC's bearish note has all but come to fruition. Unlike August 2023 when the results were completely out of the blue and were shiite, this time around there are silver linings, IMO. Yes, quite a few were pumping this alongside the naysayers with their usual views too, but it was a tossup as to which way the outlook for 2024 would go and AH decided to kitchen sink it. Naysayers got it right from a stock reaction viewpoint.

1. Larger cost cuts coming and may even be accelerated - we'll know when we get the CMD update in June. AH said in the video that there are still lots of unwanted cost overheads in the business and it's sitting largely within the Experience division.

2. The new strategy director and AH will have a big say in how they want to restructure Capita and hopefully pull off what JL couldn't achieve in his failed 6 years leading CPI. We'll have to see what their growth strategy is - ultimately it needs to translate to the bottom-line though.

3. The wild card for the Experience division is a UK economic recovery. That has been a major headwind in 2023 and I can see they're actually projecting negative revs growth, maybe in the 5 to 10% range, in 2024. That may yet recover if rate cuts are in place and business spend comes back in 2024 - but that's a H2 story for me.

Personally for me it isn't a time to sell, unlike on the H1 2023 results day when it was and I did. Good luck with whatever you do.

Culley - that's about right I'm afraid. An acknowledgement that the turnaround is still ongoing is a slap to the face of JL after his big announcement last year that it is all done and dusted - Unfortunately, it's more jam tomorrow. Save more costs and get rid of him now!!!

The problem child is the Experience division in the face of a recessionary UK economy. Unfortunately, this is another lost year for CPI, albeit the planned cost cuts are a positive.

@TerryM1 - what's your take on today's annoucements - more cuts needed and an incomplete turnaround. Even 30p at this time seems optimistic as long as there's no revenue growth..

This is, for me, full-on kitchen sinking. At least AH has acknowledged in the report that the turnaround isn't complete and that is a good starting point. There are plenty of cuts coming and I can wager they will be in the Experience division. I would've been bearish if they didn't announce any more cost cuts on the back of those results, but pleasantly surprised by the value of additional cost cuts announced. These level of cost cuts are welcome and I won't be surprised if the markets take a positive view of today's annoucement/s - the Experience division is the dog and is a direct reflection of the no-growth economy that the UK is.

These results are exactly as I'd have expected -- shiite 2023 and a big reason why, Sharehead, the SP is where it is now. However, the additional £100m cost cuts in 2024 are encouraging and the markets will like this. What this means is that prognostications of 50p valuations in 2024 are but a pipe dream, but may come to fruition once revenue starts growing again in 2025. These results possibly justify a between 30 and 40p valuation in 2024, but is still a show me story for valuations to meaningfully break out higher. Additional colour on AH's strategy in June will be welcome and he has shown that he's willing to take the bull by the horns and cut even heavily at the start of 2024 - this should've been done ages ago by the now confirmed waste-of-space JL.

P.S: Not to rub it in, Sharehead, but all this talk of AIdoing something/anything for CPI's shareprice is just shiite. All that really matters is cold hard financials and we're now possibly looking at 2025 for some dividend resumption, if the economy plays ball.